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Foiling Counterfeiting Countermeasures

The notes were all $5 bills that had been bleached and altered to look like $100 bills, sheriff's investigators said. They passed muster with the pen because it determines only whether the paper used to manufacture the currency is legitimate, Bandy said.

As a security measure, the merchants use a chemical pen that determines if the bills are counterfeit. But that's not exactly what the pen does. The pen only verifies that the paper is legitimate. The criminals successfully exploited this security hole.

Comments

Since there are now several different security measures in the bills, this is as much a failure in the checking process as anything else. I've started seeing UV lamps at cash registers. They are used to illuminate the plastic strip imbedded in the left side of the bill, which glows different colors for different denominations. This is far more reliable, since the strip cannot be removed without destroying the bill.

The next logical step would be to build these lights into cash registers, using UV LEDs.

I think this would be a good euphemism for why things like IDs aren't neccessarily good security. As mentioned, the bills had plenty of other security measures in them, however the register jockeys are trained only to use the pen because it's quick and easy. Similarly, someone who counterfeited an ID well enough would be able to pass muster reasonably easily without having to worry about much scrutiny.

"As a security measure, the merchants use a chemical pen that determines if the bills are counterfeit. ... The pen only verifies that the paper is legitimate."

I think it's worse than that. As I understand it, the kind of pen that merchants use only detects if the paper is cotton paper. It doesn't detect if the paper is the exact type used for US bills.

Anyway, the general lesson is that whenever you measure/detect a property that is used as a proxy for another (something that you *really* want to measure/detect but is not as accessible), you should be mindful of what you're doing and the limitations it implies.

This is not a new phenomenon.
The technique is referred to as, "raising of notes." The counterfeiter 'raises' the face value of the bill by bleaching out a legitimate bill and re-printing it at a higher denomination.
It well known by investigators and counterfeiters (and people who watch too many crime documentaries on Discovery Channel)...

Not sure why they used $5 bills though, they presumably could have saved $4 per bill by using $1 bills!

The Euro bills have each a different size witch makes impossible to bleach a smaller note to make a larger note. This also have an added bonus that make it easier for a blind person to count it's money.

Making the notes different sizes would address this particular problem, but create several others. For example, currency readers in vending machines would all have to be replaced by ones that could accept all the different sizes of currency and recognize both old and new bills. Also, changes in currency mean cashiers have to be trained to recognize the new currency. When the new dollar coins came out, those confused a lot of people.

If this becomes a more widespread problem, more stores will train their employees to look for the watermark or strip. Since the stores are the ones being ripped off, it's a loss that they incur due to their own negligence. That doesn't require a solution where everyone else has to change.

If anything, I could see this type of activity being used to push for getting rid of cash altogether. Most places accept debit cards, so the impact to most people would be minimal. This even has the benefit of being able to track every time someone buys a soda. That's got to have some serious national security intelligence value. If nothing else, it will keep a lot of people employed investigating dead ends.

"If anything, I could see this type of activity being used to push for getting rid of cash altogether. Most places accept debit cards, so the impact to most people would be minimal. This even has the benefit of being able to track every time someone buys a soda. That's got to have some serious national security intelligence value. If nothing else, it will keep a lot of people employed investigating dead ends."

And, we can kill two birds with one stone. In addition to giving the NSA a whole lot more raw (though useless) data to mine, we can help fulfill Biblical prophesy -- thus raising the number of religious terrorists, and giving the NSA a rationale to track all those who are buying their daily Coke fix using debit cards ;^)

Well presumably if the bills are of different sizes, then size correlates with denomination, larger denominations are larger sizes. Otherwise the smaller notes could be trimmed down to the size for larger notes.

Just out of curiosity, do the differing sizes present problems for vending machines that take bills?

Visiting the US often seems like stepping back 30 years in terms of banknotes. EU notes have varied in size according to denomination for a very long time - and handling that in machines is a long solved problem. Additionally the notes are colour differentiated.

These features are all intended to make case easier to use for those with visual impairment, but have the side effect of making "upgrading" of bank notes much more difficult.

However the US folks I have talked to about this are of the view that "money is green" and this should never change....

I'm not sure how widespread they are, but a number of local merchants have started scanning bills worth $20 or more through a device to verify its authenticity. Presumably, the device illuminates the bill from behind to examine the security thread, watermark, and other security features of the bill.

At least I assume that's what it does; I have no idea what the thing does or how it works. For all I know it's ironing the bill so it will be crisp for the next person who gets it. But since I'm an individual who doesn't handle cash all day, I'll just assume it's protecting the merchant somehow.

My personal experience has been that the pen has been falling out of favor for a while now.

The pens are worse then useless. They simply contain an iodine solution that changes color in the presence of starch. Cheap paper, think copy machine stock, will often still have the starch present as it is used as sizing. Any reasonably good quality bond will not have starch sizing left on and wil pass the test. If you want to have an "interesting!" experience, rub a little corn starch on a real 100 and try using it in a store.

Has this not already been a topic on this site. I agree with what has been said in a couple places already, the criminals are not exploiting a poor security feature in the notes but merchants have not properly trained cash handlers on ALL the notes' security features. There is more than just the paper to check if you are worried about accepting counterfeit.

Most of the vending, ATM, etc. machines I see have an obvious plug-n-go currency handler that is engineered apart from the body of the machine itself.

Without doing any research, it wouldn't suprise me if some/most mechanical vending entities are built without the currency unit, and the currency units are manufactured by a different facility and the two bits are assembled according to their destination country. Even if this isn't common practice, the engineering problems have already been solved.

So there probably is a cost to convert existing machines, but the cost isn't as great as designing and rebuilding things from scratch.

Although I imagine gumball machines won't be taking new coinage anytime soon...

"whenever you measure/detect a property that is used as a proxy for another (something that you *really* want to measure/detect but is not as accessible), you should be mindful of what you're doing and the limitations it implies."

That's really a big part of the problem with DRM. The property you really want to test is "is this a legal copy", but that cannot be adequately expressed as a function of the binary ones and zeros that make up the data, so there are several levels of indirection and approximation necessarily involved. See my essay "What Colour are your bits?" at http://ansuz.sooke.bc.ca/lawpoli/colour/2004061001.php

Unless things have changed, that's not true. When that plastic strip was first introduced, I removed it from a 20 bill out of curiosity as to its composition. Took me less than 5 min w/ a sharp razor and tweezers.

Those people that are so attached to the "one size, one colour" nature of America's bills that they insist on not changing anything, should be paying for a small portable bill-checker for the blind and near-blind.

Back when I was a wee lad, we used to tell jokes about the Irish counterfeiter, who shaved the corners off 50p coins to make them look like 10p.

It's interesting to note that every bill-feeder I've used that takes EUR paper currency has been /horrible/. Perhaps this is not because they come in a range of widths, but that'd seem to be the obvious reason. (I lived in Germany for two years.)

Mike Sherwood - "Making the notes different sizes would address this particular problem, but create several others. For example, currency readers in vending machines would all have to be replaced by ones that could accept all the different sizes of currency and recognize both old and new bills. Also, changes in currency mean cashiers have to be trained to recognize the new currency. When the new dollar coins came out, those confused a lot of people."

The major problem for the US if it were to change its currency is simply that everything is hardcoded to expect those size of notes and coins and those only. Note readers, till drawers, counters, bill folds, wallets - everything that holds or counts money. This is so ingrained that it is practically a constraint to any new note, even if it means problems for the blind, or just people like myself who despise carrying rolls of green around without any visual clues as to how much money is there.

Given preparation and ample warning I doubt they would be that great an impediment. Much of Europe switched from wildly varying national currencies to the Euro. Most vending machines were already programmable so the switchover meant only tweaking the various settings to the new notes & coins. The EU is more coincentric (1 & 2 euro coins see to that), but note readers are very common too for tickets, prepay phone credit etc.

Europe again demonstrates that training is possible too. It takes perhaps a month before everyone is extremely familiar with the new currency. This is not least because the novelty means people study it very carefully. Copious amounts of flyers detailing its features help too.

I don't remember having any more problems with bill feeders in Germany than I do back in the US. At least once a week the bill feeder at the end of the hall gives me a hassle. In Germany that problem was solved by the 5 DM coin.

What I want to know is why to the clerks only check the new $20 with the pen. They accept the old (supposedly easier to counterfeit) $20 bills without a second glance.

Yet another reason we in Europe have bills of different physical sizes. And more importantly, bills of larger values are also physically larger: A bill of 100 euros is larger than that of 10. So while a fraudster could succesfully change a 100 euro to the less favorable 10, an upgrade would not be posible.

Then theres Australian money, which is plastic and lasts 10 times a long as paper, comes in different sizes and colours for different denominations, has a transparent window in it with the denomination lightly embossed into it, and is printed with various engraving-type images using some kind of raised printing thus giving each note a different tactile feel.

God only knows what other security measures are used - those are just the obvious ones.

Oh and you can play tricks on your US-based nephews, by telling them that they can keep the $50 note if they can tear it apart. Ha-ha. Life is cruel.

The story is as much about criminals adapting as it is about people getting a false sense of security from new technology.

"Then he held the bills up to the light. 'You could see Lincolns instead of Franklins,' he said."

Doh! How much do those special pens cost and how are they being billed (so to speak)? Layers of defense (rubbing the bills, holding up to the light, etc.) would have prevented the fraud...sad that anyone was led to belive the pen is sufficient on its own.

I spent 3 weeks in Australia, and rather enjoyed being able to snag a $10 out of my wallet without opening it up completely and/or whipping out a big block of bills. (I was more than a little annoyed at the $1/$2 coins, just because I don't like carrying change)

I don't buy any of the defenses of the current currency printing standards.

As a side note -> since (in the US) ATMs usually only distribute $20s, bill size difference won't matter there... and most vending machines have a fairly set price range, and could be set to only accept one size of bill without much of a customer loss.

About everyone agrees that US money material form needs an overhaul in order to allow for more security.

Of course over the years, some additional features have been added but basically, as other people have pointed out here, there remains a least problems with the size and shape of the bills.

But here security concerns meet political and economical problems. US money being such a de facto standard around the world, it is very hard to go for a radical overhaul of the notes which might trigger a panic worldwide when all the people who detain US notes realize that the notes they have might lose their value.

The sheer difficulty of organizing the transition to a whole new scheme of money notes for the US dollar and the eventual political and economic instability that might follow almost preclude any half serious attempt to modernize the bills.

One of the problems would come from all the forged money. US money being the most counterfeited in the world, if there was a change of notes then there would be a risk of laundering massive amounts of forged money.

So the US is a bit in a damned if you or don't situation. If they keep the current bills, they will still have the same problems but if they change them they will face a host of new ones.

So as the old saying goes : No problem resists the absence of a solution.

> One of the problems would come from all the forged money.
> US money being the most counterfeited in the world, if there was
> a change of notes then there would be a risk of laundering massive
> amounts of forged money.

True. But from a currency stability standpoint, it's probably better to take the risk that some forged currency will be laundered through this process, while making it more difficult to forge the currency (says the non-economist). Note you get the side benefit of being able to verifiably remove a large volume of counterfeit currency from the market -> I would assume that most currency being swapped out would go through some validation tests, and a bunch of funny money wouldn't be exchangable.

Here in Bulgaria we had more interesting fake $100 bills back in the '80es while we were behind the Iron Curtain and not much people had even touched US currency. The guys were taking $10 bills and "splitted" the 0 into 2 zeroes (by adding a small black vertical stripe in the middle of the two relatively large white parts of the original 0 digit so it look like a zero itself) and sold them in the black market as $100 bills. Of course you cannot use this technique anymore but it's an intereseting way to use original note for producing a fake one.

i support keeping american money the way it is now, all the same size, the size that wallets are built to handle.
if we were to change currency design, the most interesting option would be whether or not to invalidate the old currency after a certain date. america has never done this, all notes going back to the dawn of the republic are still legal tender (but worth more to collectors). invalidation would drive a lot of old bens out of buried coffee cans and perhaps give us a one-shot economic stimulus.

I wonder if we could shift over totally to counterfeit bills, thus saving all the costs of the treasury.
How soon would we need wheelbarrows to carry the money as the counterfeiters produced enormous amounts.

For almost 20 years, I thought that US currency ought to be plastic. I was an avid bridge player in college and can attest to the durability of a deck of plastic cards. It's good to hear that Australia realized this. I only wish the US treasury/mints would have made a decision to switch from paper to plastic for the cost savings of not having to print as many bills because plastic bills last so much longer.

Also, the colors in plastic can be 3 dimensional, as well as transparent, allowing the bill's authenticity to be verified in more ways than our paper bills.

Maybe the decision to stick with paper had to do with current minter skill levels and prior investment in paper-printing technologies.

Does anyone know what happened to the watermark on the bills after the bleaching? The watermark is the easiest thing to check after the denomination printing and special (color-changing) ink.

Here in Brasil, we have different colors for each note, we have a plastic note for R$10,00 and a silver stripe in the R$ 20,00 notes. There's also the usual stuff like watermarks, tiny colored stripes in the paper, microprints and so on.
But, we still facing problems with counterfeited money :-(
I don't think that this can be fully prevented, but I do think that it's possible to make it so expensive that it will become unpracticle and unproductive to do it.

Regarding banknote recognition in ATMs: where I live (German Switzerland), many automats reliably accept both franks and euros (answering doubts expressed in previous postings). These banknotes span a wide range of color, features, and size:

"if we were to change currency design, the most interesting option would be whether or not to invalidate the old currency after a certain date."

The issue of "invalidating" old notes is not that difficult to resolve. Typically "withdrawing" them from circulation is sufficient for most of the currency (after all, individual notes are typically withdrawn and reissued all the time as they get damaged, so after a few years, the old notes stored in a sock under Uncle Joe's bed will be only a fraction of the amount of notes in circulation), but a $5 note still remains fundametally worth a face value of $5.

The UK goes a step further when withdrawing (The UK obsoletes banknotes regularly - i.e. every decade or so, but gives 2 or 3 years notice of its withdrawal when the new notes are issued) - after a set date they cannot be accepted at most high street banks, and so as a knock on effect no retailer will accept them either.

However, the banknotes remain, *forever*, available for redemption for modern currency at the Bank of England in London.

Thus the trade off between the hassle of accepting old money, versus losing its value is resolved after a fashion.

Finally, remember that the term "legal tender" is about servicing "debt" - a retailer is under no obligation to accept your money in exchange for goods & services they are selling you there and then! So, I can't force a bus driver to accept my £50 note when I get on a bus...

Off topic: This thread is an example of a trait I've observed reasonably often with Americans, to wit: "If America hasn't solved the problem, it can't be solved". Changes of currency old notes, different sized notes, more secure notes, etc, are all problems that other countries have grapled with and solved, but that seems to count for nothing - or not even occur - to residents of North America.

Another example is switching from imperial to metric. "Oh, we couldn't do that - it'd cause too many problems". Well, plenty of other countries have done it, with almost no problems.

I guess it's a variant of the NIH Syndrome (Not Invented Here).

On topic: NZ notes are pretty much the same as Aust notes in terms of construction and security. The high-use plastic notes tend to fade a bit along creases (like the colour is rubbing off), but the notes are other wise virtually indestructible. Deliberate force works of course, as does fire, but anything else - including water - is as nothing.

It was a couple years ago if I remember rightly, that several new security features were added to Canadian bills, including a hologram strip. Also at this time, embossed Braille markings were added. I thought this was a great idea at the time, but was not convinced that the dots would stand up well as the bill wears from handling.

Looking in my wallet right now, I find several of the 'old' 20's without the hologram or the braille, and only one 'new' one. The braille is worn down to the point that I can barely see it, yet even my untrained fingers can distinguish the pattern of the dots.. I'm somewhat impressed, but this particular bill would still be considered fairly crisp. I doubt the braille has held up very well on the $5 notes.

As for differently coloured notes, Canada's been doing this for as long as I can remember, and I frankly don't know how Americans can stand their monocoloured money.. All I need is to glance at any part of the bill, and as long as there's any ink at all on that part, I know its denomination. If it's green, its a 20. If it's blue, its a 5. (10's are purple, 50's are pink, and 100's are a rather odd brownish shade) It's all terribly convenient.

It seems that merchants are already defending themselves against high value fakes; when I took a trip to Florida, I bought a few $100 US bills from a bank in Australia so I would have some spending money as soon as I got there. No-one would take 'em at all. 20's were the highest note that any shop would accept. No wonder ransom notes always specify *small* unmarked bills.... :)

@ Pat Cahalan
From this thread:
"Making the notes different sizes would address this particular problem, but create several others. For example, ..."

"differing sizes present problems for vending machines" (granted this was a info query)

"The major problem for the US if it were to change its currency is simply that everything is hardcoded to expect those size of notes and coins and those only. Note readers, till drawers, counters, bill folds, wallets - everything that holds or counts money"

"But here security concerns meet political and economical problems"

"i support keeping american money the way it is now, all the same size, the size that wallets are built to handle."

"The major problem..." -> that's Adam, who continues with "Given preparation and ample warning I doubt they would be that great an impediment.", so I think this doesn't count.

"But here security..." -> that's Anonymous, #2

"I support keeping..." -> that's another_bruce, #3.

"Whether or not to invalidate..." -> that's logicistical, and as pointed out on the thread, different countries have solved this in different ways.

So there's really only 3 comments regarding problems changing, and I don't see anyone saying, "these are insoluable" or "we better not ask those euro guys how they solved these problems when they switched their currency".

New Zealand has had different-sized notes for as long as I can remember. Like Australia, ours are now make out of a polymer (plastic), and have several security features:
1. Each polymer note has two transparent windows. One of the transparent windows is oval-shaped and sloping and has the denomination numerals embossed in it. The other clear window is in the shape of a curved fern leaf.
2. There is a fern immediately above the clear fern-shaped window. When you hold the note to the light, the fern should match perfectly with another fern on the other side.
3. You should easily be able to see a shadow image (watermark) of the Queen when you hold the note to the light.
4. Each note has an individual serial number printed horizontally and vertically.
5. Polymer notes have raised printing, which stands up on the surface and can be felt when you run your fingers over it.
6. Tiny micro-printed letters "RBNZ" should be visible with a magnifying glass.
7. Under an ultraviolet light, the polymer note appears dull. Most commercial papers used in forgeries will glow under an ultraviolet light. However, polymer notes contain special inks, which make particular features glow under an ultraviolet light. For example, the front of each genuine note has a fluorescent patch showing the denomination numerals, which can only be seen under an ultraviolet light.

The biggest problem I see with some of the anti-counterfeiting measures is the micro-printing. As the population ages, our eyes are less able to read small print without the aid of magnification.

People (retailer employees) should have as many clues as possible as to the authenticity of a bill. Just because there is a security thread, doesn't mean that its print corresponds with the face value of the bill. Compounding this problem is the need to adequately light the bill.

As the speed of retailing increases, so does the retailer's tolerance for employees skipping bogus bill checking steps. "There are people waiting in line, folks. Let's hurry!" is a good mantra to remember. My guess is that some bogus bills are part of the overhead expected by companies, just as they expect some level of shoplifting and employee theft. Only 'reasonable' steps are taken.

@pat calahan
i am a traditionalist when it comes to the design of money, i'm comfortable with what i'm used to. there's an underlying issue of the value of money itself, viewed from the knowledge that the federal reserve can print as much money as it wants, thereby diminishing the value of the money in my wallet, which is as of today still all the same size. when the yellowish sacajawea dollar came out, i was struck by its resemblance to a large penny, thought that once upon a time, an old penny had the same purchasing power as this new coin. our incoming fed chairman ben bernanke is on record as supporting "dumping money out of helicopters" to address the illusory deflation threat of several years ago, apparently this is a figure of speech in economics but thanks for the heads up ben, this underscores the necessity of keeping some of your assets denominated in other than dollars to stay ahead of the inevitable inflation that will occur when it comes time for my country to pay the bills for its profligate ways the only way it can.
i know traditionalism isn't entirely rational, but there it is.

Slightly of thread but entertaining.
I live in a small, dying city in Appalachia. Year before last when they started distributing the new, multicolored $20 bills, I was told by someone who worked at a local bank that counterfeits of the new bills reached the area before the local banks were shipped any of the new bills.

It's far too late to post to this thread, but I had to anyway. Note Printing Australia is probably the reason the US hasn't moved to polymer notes. This company has a stranglehold on the world market for polymer notes, and the US can't afford to license the technology. (It's patented.)

Everyone seems to be forgetting the fact that it's harder to check the cash on busy hours with lots of impatient customers waiting in line while most of the bills are good ones. It's easy to miss a fake bill in situations like that. Criminals would take advantage of that.

I experienced this firsthand just a couple of weeks ago. Moving $2k from one bank to another where electronic transfer was too much of a hassle, I asked for hundreds, and was astonished to see the bank teller hold up each bill to the light as she counted the deposit. I asked why and she said, they recently had some that looked like hundreds but were fives, and showed me how to look at the watermark.

Probably no one will read this, since I'm posting late, but everyone advocating the different size and color bills for easy recognition seems to be ignoring a security problem with that.

Can't speak for others, but when I carry bills I put the low denominations on the outside. This prevents anyone looking over my shoulder at the register from knowing how much cash I have, making a much less attractive target for a mugging, etc.
Having different color and size bills not only allows you to easily determine how much cash you're carrying, but anyone onlooking can do so as well. There are some places in, say, Washington D.C. that I'd never be willing to carry cash with those bills.

One dollar bills don't have watermarks or plastic strips. That's why they use $5's.

For some reason watermarks on bleached bills are fuzzier, less distinct. You can see the watermark, but it takes bright light to discern that the head is Lincoln's rather than Franklin's!

Such bills are usually passed in low light levels--bars & taxis--and in harried environments--busy stores with low-paid clerks--where they have a better chance to slip by unnoticed (until discovered under the bright fluorescent light of the back office!)

If that pen is the standard iodine solution marker that's out there, the criminals need not even go to the length of bleaching money.

James Randi has talked about these pens. The pen is used to detect the presence of starch. Iodine plus starch turn black instead of the iodine's normal pale brown. The conjecture is that counterfeiters use cheap, recycled paper which often has starch added as part of the recycling process, and they are trying to economize by buying cheap paper. There are false negative: the pens show that newspaper, paper towels, and toilet paper are all valid currency. And if you spray your money with spray starch, you get a false positive.

I think this is a case of false security -- the cashier doesn't know what's really being tested and assumes that the pen provides perfect security. The store owner detected something was strange by examining the bills; if the cashier had done that instead of relying on the pen the counterfeiters would have been foiled.

I'll be spraying starch on the left half of my money this week to have fun with the pen users. :-)

"Visa cards and micro chips" I hope not.
Salvation Army, boy/cub scouts and girl scouts rely on dontations from people. Plus paying teenage babysitters and such would be a problem.

Any thoughts on a $200 bill or bring back the $500? I like the Austrailian bill with the transparent hologram. If you made the holograms hole different sizes then the blind could feel it. Right now they fold the mony different ways to denote different denominations here in the US.

My curiousity came from a local news broadcast about a man bleaching U.S. $10.00 bills, reprinting them laser style, for a few bucks profit, passing them at small locations daily that really didn't have the turnover or quality of employees that had the time or suspiscion to give it much thought. accepts these bills routinely with practicallly no riskto the perpentator, Enough stops daily doubling his money, he really has a profitable business going for him at little investment. However, these small type business, running on a shoe-string are hurt severily financially. There has to be a simple, cheap, and quick method these bums can be stopped. Someone please come up with an idea please! Thanks for listening.

look, all you guys need to do to distinguish a bleached out bill from a real one.. and this is the most obvious security feature of them all, is to look at the bottom right corner of the bill, the hologramed "20". It should turn from green to black when you turn it into light. printed bills can not replicate this feature.

It is the easiest way to tell because one can easily get confused checking for a watermark, seeing it, and besing satisified and not realizing that it was abraham's face and not bennys.

"Not sure why they used $5 bills though, they presumably could have saved $4 per bill by using $1 bills!"

They use fives because 5$ bills are the lowest denomination in the U.S. that still has all the security features. (watermark, microprinting, security thread, ect.) Most clerks simply look for the security features instead of paying close attention to them. For example, a store clerk might simply check for a watermark, instead of looking closely to see if it displays a picture of Benjerman Franklin or Abe Lincon. 1$ bills don't have any watermarks at all.